Anwar Says Deal in 2003 for Russian Military Aircraft Sukhoi Riddled with Corruption

"...On August 5, 2003, Malaysia signed a contract to procure 18 Sukhoi Su-30MKM jet fighters from Russia under a package deal worth about US$900 million.

The aircraft will be delivered in stages between June 2006 and end of 2007. The payment for the aircraft will be stretched until 2009.

In return, Russia will purchase Malaysia's palm oil, provide transfer of space technology, and train a Malaysian cosmonaut. The Su-30 MKM will be fitted with Western avionics.

The government plans to expand Gong Kedak Airbase (an old World-War 2 airbase) into a modern major airbase to house this new acquisition. The base will be complete with new extended runways and advanced air control systems. The Su-30MKM combat aircraft will form a squadron of dedicated multi role combat aircraft to complement the RMAF's present war-birds -- the MIG-29/NUB, F/A-18D and Hawk MK 108/208.

Pilot training in Russia started in early 2004. Two Su-30MKI pre-production aircraft (number 04 and 05) have been converted to Su-30MKM prototypes and are being tested now. The first batch of Su-30MKMs are being produced by the Irkustk plant now for delivery in 2007.

The Su-30MKM will be another variant based on the Su-30MKI tailored to the customer's requirements with regards to its avionics suite. For example, Israeli-produced ECM systems as seen fitted on the Su-30MKI will be replaced by Russian and South African systems. Two of Sukhoi's Su-30MKI pre-production aircraft (bort numbers 04 and 05) serve as Su-30MKM prototypes. The first batch of Su-30MKMs is being manufactured at the Irkustk Plant and is scheduled for delivery in 2007, with all aircraft being delivered in 2008. The Su-30MKM proposal was pitted against the Boeing F/A-18 Super Hornet, but Malaysia seemed to have settled for a mixed fleet. Malaysia already operates both the MiG-29 Fulcrum and F/A-18C/D Hornet.

May 19,2003 Press report: The purchase of the Sukhoi jets will be through counter trade, most likely with Malaysian palm oil. ''Malaysia may partly pay for the planes with the sale of commodities but this will be decided at a later date,'' Najib said.

Excerpts:

".... Anwar Ibrahim on Tuesday called for a thorough investigation into a 2003 deal to buy military aircraft from Russia.

He alleged that a former Cabinet minister received a massive commission at taxpayers' expense.

..... US$108 million in commissions were paid to IMT Defence Sdn. Bhd. to act as a facilitator in the US$900 million deal by Malaysia's defense ministry to purchase 18 Sukhoi Su-30MK fighter aircraft.

Anwar claimed he has evidence to prove commissions were paid, but said he could not disclose it now to protect his sources.

.... the commissions came to light when a director of IMT Defence, Mohammed Zainuri Mohammed Idrus, filed a suit in March 2005 against Adib and other directors of the company, to prevent the company from sacking him.

He said IMT's chairman, Mohammed Adib Adam, was appointed as the middleman in February 2004. But the deal to buy the aircraft from a Russian state company, Rosoboronexport, had ALREADY been reached on May 19, 2003.

Mohammed Zainuri lodged a police report on Sept. 30, 2006 alleging that Adib Adam had stolen US$108 million in commissions by setting up a NEW company with a name similar to IMT Defence, to which the money was channeled.

In his suit, Zainuri claimed that he was being sacked to prevent him from exposing the Sukhoi deal.

Anwar said:

"WHY do you need a facilitator when you have generals going back and forth (between Malaysia and Russia) to negotiate the deal?

It is clearly, blatantly corruption. It is certainly not transparent and very unusual. Malaysians have the right to know.

What really transpired in the antics alleged by Zainuri in IMT Defence Sdn. Bhd?

WHY haven't the police or the Anti-Corruption Agency begun investigations?"

.... Defense Minister Najib Razakwas answerableto the Malaysian public about the alleged commission payments because they were made using taxpayers' money.

Najib's aides could not be reached for comment.

Najib and Adib have not commented publicly about the lawsuit. Norashikin said the company was aware of Zainuri's allegations but declined to comment further.

Police officials and those at the Anti-Corruption Agency could not be immediately reached for comment.